Correlation Between WiseChip Semiconductor and Lotes
Can any of the company-specific risk be diversified away by investing in both WiseChip Semiconductor and Lotes at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WiseChip Semiconductor and Lotes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WiseChip Semiconductor and Lotes Co, you can compare the effects of market volatilities on WiseChip Semiconductor and Lotes and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WiseChip Semiconductor with a short position of Lotes. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiseChip Semiconductor and Lotes.
Diversification Opportunities for WiseChip Semiconductor and Lotes
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WiseChip and Lotes is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding WiseChip Semiconductor and Lotes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotes and WiseChip Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WiseChip Semiconductor are associated (or correlated) with Lotes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotes has no effect on the direction of WiseChip Semiconductor i.e., WiseChip Semiconductor and Lotes go up and down completely randomly.
Pair Corralation between WiseChip Semiconductor and Lotes
Assuming the 90 days trading horizon WiseChip Semiconductor is expected to under-perform the Lotes. But the stock apears to be less risky and, when comparing its historical volatility, WiseChip Semiconductor is 1.34 times less risky than Lotes. The stock trades about -0.02 of its potential returns per unit of risk. The Lotes Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 101,000 in Lotes Co on September 14, 2024 and sell it today you would earn a total of 90,000 from holding Lotes Co or generate 89.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WiseChip Semiconductor vs. Lotes Co
Performance |
| Timeline |
| WiseChip Semiconductor |
| Lotes |
WiseChip Semiconductor and Lotes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WiseChip Semiconductor and Lotes
The main advantage of trading using opposite WiseChip Semiconductor and Lotes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiseChip Semiconductor position performs unexpectedly, Lotes can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lotes will offset losses from the drop in Lotes' long position.| WiseChip Semiconductor vs. AU Optronics | WiseChip Semiconductor vs. Innolux Corp | WiseChip Semiconductor vs. Ruentex Development Co | WiseChip Semiconductor vs. Novatek Microelectronics Corp |
| Lotes vs. AU Optronics | Lotes vs. Innolux Corp | Lotes vs. Ruentex Development Co | Lotes vs. WiseChip Semiconductor |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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